NCLAT asks Liberty House to deposit Rs 380 crore by Feb 14 for Adhunik Metaliks, Zion Steel

The National Company Law Appellate Tribunal (NCLAT) on Wednesday asked the UK-based Liberty House to deposit, by February 14, a sum of Rs 380 crore, as per its resolution plan for Adhunik Metaliks and group firm Zion Steel. It has also been asked to pay costs incurred in the corporate insolvency resolution process (CIRP) and make payments to operational creditors.

The two-member NCLAT bench, headed by Justice SJ Mukhopadhaya, has also asked Liberty House to deposit the amount in the account of State Bank of India, the lead bank. “Once the total amount is deposited, this appellate tribunal will consider the rest of the proposal as made in paragraph 7 (of the revised affidavit of Liberty House) and will pass order,” the bench said. The paragraph 7 mainly speaks about the process that should be followed once the payment is made. The NCLAT has scheduled the matter on February 17 for “orders”.

On January 7, the NCLAT bench gave Liberty House time till January 9 to submit an “affidavit giving therein its unconditional and unqualified proposal showing time-frame for implementation of the plan”. Liberty House, accordingly, submitted the affidavit within the schedule.

However, while hearing the matter, the bench found some incongruity in the affidavit and asked Liberty House to file a revised affidavit by January 20, outlining specific time-frame and other details of its resolution plan.

In the revised affidavit, Liberty House said it will, “deposit, Rs360 crore (Rs410 crore less Rs50 crore already deposited) for Adhunik and Rs10 crore (Rs15 crore less Rs5 crore already deposited) for Zion, as full and final settlement towards all financial creditors (lenders) as per the resolution plan, within three weeks of NCLAT order, in a bank account specified by and under supervision of NCLAT.”

The company’s counsel Arvind Kumar Gupta also said that Liberty House will also pay, in addition, a maximum of Rs10 crore “towards any and all contingencies arising from this resolution as a goodwill gesture.” It will also, as per the resolution plan, make the payment of corporate insolvency resolution process (CIRP) costs and to the operational creditors.

Through the affidavit, Liberty House has the requested the NCLAT to direct the liquidators and past directors of Adhunik and Zion to demit offices upon depositing the fund and entitle the company to appoint all directors to the board of both the corporates. It also wants the CoC to deposit the signed and executed deed of debt assignment of both Adhunik and Zion with the registrar of NCLAT for simultaneous exchange as per the resolution plans.

The Kolkata bench of the NCLT had in July 2018 approved the resolution plan submitted by Liberty House, with lenders agreeing to take a haircut of around 92% and settling for Rs410 crore against their outstanding dues of Rs5,370 crore. But, the London-based company failed to make the payment.
Lenders to Adhunik Metaliks are SBI, Punjab National Bank, ICICI Bank, IFCI, Punjab & Sind Bank, UCO Bank, Allahabad Bank, Bank of Baroda, Corporation Bank and SREI Infrastructure Finance, among others.

Source: Financial Express